Pandora May Build An Ad Exchange (Just Like Facebook!)

Pandora chief revenue officer John Trimble says the music streamer is interested in building an ad exchange, just as Facebook recently did, if the company could find the right partners.Ad exchanges take many forms, but basically they allow other advertisers within a given network to target users with tracking cookies that identify them when the user enters the Pandora environment. Relevant ads would then be activated by those cookies in Pandora.

I would say the exchange opportunity is always being strategically analysed. We have to ask ourselves, “How do you create an exchange from a premium position?” To be able to leverage targeting, our reach, and potentially different ad formats that we have the ability to deliver across those multiple platforms is why we’re interesting in considering the concept of building a private exchange. We like the idea of it — with the right demand partners, of course, but we don’t see a need to rush into that space yet either. We’re especially interested in how a private exchange translates into a mobile environment.

Trimble is probably asking himself where Pandora goes next: Once you’ve sucked up all the available ad dollars for your inventory, the only way to grow is to bolt-on income from advertisers who are currently not on Pandora’s platform.

An exchange would be one step in doing that—which is why Facebook is already doing it.

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